Jobs -663k, Factory Orders +1.8%, Underwater Refis, Wells Warehouse Lending

Factory Orders Up 1.8%, Stocks Rally
How ‘bout this market? Yesterday rates moved higher, and prices lower, after Factory Orders increased 1.8% in February, following a downwardly revised 3.5% drop in January, and six consecutive monthly decreases. So why wouldn’t rates come down? US stock markets continued their rally, and in fact most overseas stock markets improved. (Japan’s was helped by Toyota’s stock rallying after a bank agreed to help finance US car sales.) And it would appear that there is a change in mood about the economy: in spite of the continued bad news, investors appear to feel that the worst is behind us. Just tell that to some Detroit or Sacramento home owner! Maybe investors are just tired of sitting on piles of cash…

Jobs Report: -663k
This morning the unemployment data came out pretty close to expected: U.S. employers cut 663,000 jobs in March, and the unemployment rate hit 8.5%, the highest since 1983 when Reagan was in office. And although February’s numbers were unrevised, January’s were changed to a loss of 741,000, the biggest decline since October 1949. Since December 2007, the U.S. economy has dropped 5.1 million jobs, with about two thirds of the losses occurring in the last five months. After the news, bond prices are down slightly, with the 10-yr yield currently sitting around 2.69% and mortgage prices a shade worse than yesterday afternoon. (Interestingly, with the high profit margins now built into mortgage pricing, in spite of the MBS market worsening yesterday, many originators decided to absorb the price hit instead of passing it along on their rate sheets in order to potentially help locks.)

Chase 105% LTV Refi
Chase Correspondent announced their ability to purchase loans under the new Fannie Mae program DU Refi Plus™. This program is designed to assist borrowers that have demonstrated good pay histories on their mortgages but have been unable to refinance due to a decline in home values.

Wells Keeps Wachovia Warehouse Business
As mentioned several times in recent weeks by me (not that I am any great prognosticator – procrastinator is more the case) Wells Fargo is keeping Wachovia’s warehouse business that will provide funding to independent mortgage bankers. Are they going to open it up to any Tom, Dick, and Harry? That is highly doubtful, and will probably focus on their best clients with proven production, high net worth, and a solid track record in selling loans to Wells. It is rumored that it will not be a captive line – meaning that unlike competitor’s lines, originators are not forced to sell a percentage of their production to Wells.

Daily Humor
One day six retired men sat in an apartment playing poker when one of them, Jack Murphy, lost $500 in a single hand. In shock, he clutched his chest and crumpled at the table-dead. Out of respect for their friend, the five others stood up as they continued playing.
Eventually, one of the men looked around the table and said, “Boys, someone’s got to tell Jack’s wife what’s happened. Who will it be?”

They decided to draw straws-and Jimmy Jones drew the short one. The other men were full of advice for Jimmy: “Be discreet,” “Be gentle,” “Don’t make a bad situation worse.”
“Discreet. You don’t have to worry about that,” assured Jimmy. “I’m always discreet. Discretion is my middle name. Now let me out o’ here so I can get this done.”
Jimmy went over to the Murphy home and knocked gently on the door. When Mrs. Murphy answered, Jimmy said, “I must tell you that your husband has just lost $500 playing poker and is afraid to come home.”
“Tell him to drop dead!” cried Murphy’s wife.
“Anything you say,” he assured her.